DigitalOcean (NYSE:DOCN) Sees Large Volume Increase - Still a Buy?

Key Points

• DigitalOcean's shares experienced a trading volume of 1,603,050 on Tuesday, which is a 2% decrease from the previous day.
• Wall Street analysts have mixed ratings, with seven buy ratings, one sell rating, and an average price target of $41.45.
• The company reported a quarterly earnings per share of $0.59, surpassing estimates, and a revenue increase of 13.6% year-over-year.

DigitalOcean Holdings, Inc. (NYSE:DOCN - Get Free Report) shares saw unusually-strong trading volume on Tuesday . Approximately 1,603,050 shares were traded during trading, a decline of 2% from the previous session's volume of 1,637,611 shares.The stock last traded at $29.40 and had previously closed at $29.56.

Analyst Ratings Changes

A number of equities research analysts have recently issued reports on the company. UBS Group dropped their price objective on DigitalOcean from $44.00 to $32.00 and set a "neutral" rating on the stock in a research note on Thursday, May 8th. Needham & Company LLC reaffirmed a "hold" rating on shares of DigitalOcean in a research report on Tuesday, May 6th. The Goldman Sachs Group decreased their target price on DigitalOcean from $46.00 to $41.00 and set a "buy" rating on the stock in a report on Wednesday, May 7th. Barclays upped their price objective on DigitalOcean from $38.00 to $40.00 and gave the company an "overweight" rating in a report on Wednesday, August 6th. Finally, Stifel Nicolaus set a $36.00 target price on DigitalOcean in a report on Tuesday, August 5th. One equities research analyst has rated the stock with a sell rating, five have assigned a hold rating and seven have given a buy rating to the company's stock. According to data from MarketBeat, the stock currently has an average rating of "Hold" and an average target price of $41.45.

DigitalOcean Price Performance

The firm's 50-day simple moving average is $29.13 and its 200 day simple moving average is $32.60. The firm has a market capitalization of $2.82 billion, a price-to-earnings ratio of 23.87, a P/E/G ratio of 1.78 and a beta of 1.75.

DigitalOcean (NYSE:DOCN - Get Free Report) last announced its quarterly earnings data on Tuesday, August 5th. The company reported $0.59 earnings per share for the quarter, topping the consensus estimate of $0.47 by $0.12. The business had revenue of $218.70 million during the quarter, compared to the consensus estimate of $216.62 million. DigitalOcean had a negative return on equity of 73.19% and a net margin of 15.18%. DigitalOcean's revenue for the quarter was up 13.6% on a year-over-year basis. During the same period in the prior year, the company earned $0.48 EPS. As a group, research analysts predict that DigitalOcean Holdings, Inc. will post 1.01 earnings per share for the current year.

Insider Activity

In related news, insider Bratin Saha sold 3,461 shares of the firm's stock in a transaction that occurred on Wednesday, June 18th. The shares were sold at an average price of $27.77, for a total value of $96,111.97. Following the completion of the transaction, the insider owned 294,546 shares in the company, valued at $8,179,542.42. This trade represents a 1.16% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Company insiders own 0.96% of the company's stock.

Institutional Inflows and Outflows

Hedge funds have recently added to or reduced their stakes in the company. Public Sector Pension Investment Board lifted its holdings in shares of DigitalOcean by 6.0% in the 2nd quarter. Public Sector Pension Investment Board now owns 214,160 shares of the company's stock worth $6,116,000 after purchasing an additional 12,205 shares in the last quarter. Tower Research Capital LLC TRC lifted its stake in shares of DigitalOcean by 170.3% in the second quarter. Tower Research Capital LLC TRC now owns 8,878 shares of the company's stock valued at $254,000 after buying an additional 5,594 shares in the last quarter. Man Group plc grew its holdings in shares of DigitalOcean by 0.5% during the second quarter. Man Group plc now owns 82,485 shares of the company's stock valued at $2,356,000 after buying an additional 420 shares during the last quarter. Lazard Asset Management LLC grew its holdings in shares of DigitalOcean by 34.5% during the second quarter. Lazard Asset Management LLC now owns 1,660,731 shares of the company's stock valued at $47,430,000 after buying an additional 426,264 shares during the last quarter. Finally, Hudson Bay Capital Management LP bought a new stake in shares of DigitalOcean during the second quarter worth about $1,714,000. Institutional investors own 49.77% of the company's stock.

About DigitalOcean

DigitalOcean Holdings, Inc, through its subsidiaries, operates a cloud computing platform in North America, Europe, Asia, and internationally. The company's platform provides on-demand infrastructure and platform tools for developers, start-ups, and small and growing digital businesses. It also offers infrastructure-as-a-service (IaaS) solutions comprising compute and storage services, as well as networking projects, including Cloud Firewalls software, Managed Load Balancers software, and Virtual Private Cloud (VPC).